CEO's Address At RMG AGM

My
name is Jim Boult. I am RMG’s newly appointed Deputy
Chairman and Chief Executive Officer.

I am delighted to
have secured this position with a company which I believe
has the potential to substantially outperform its
competition and the Market’s expectation of its performance
of the next three to five years. I will come back to this
point shortly and explain why I consider this to be the
case.

Firstly a couple of background issues.

As a
newcomer to the RMG team, I believe I am able to look at the
company and what has been achieved over the past 12 months
with a fresh view. While there are aspects which have
disappointed the board, and I am sure the shareholders, the
task of rolling up 22 quite separate and disparate company’s
and forming the RMG business unit from that process has been
a significant task. This process has been managed
admirably by Paul Cooney, my predecessor, and I can only
have admiration for him in achieving this difficult and
demanding goal.

Our company started with 6 software
packages, a raft of hardware platforms, 22 different
corporate cultures and within that some philosophical
differences in the way business was transacted. Over the
past 12 months that vaguely related grouping has been
transformed into the RMG family, and now provides the basis
upon which we will grow the company and achieve
profitability.

I thought it would be useful for you
to know my own background in view of the significance of the
role I now hold with RMG. My qualifications for this task
primarily relate to the position I held as Chairman of
Baycorp Holdings Ltd from the latter part of 1989 until mid
1998. In that period, almost four years was spent as
Executive Chairman of the company, at which time I was
charged with the day to day control of Baycorp.

For
anyone who isn’t aware, Baycorp is a competitor of RMG’s
primarily in the New Zealand market but also in Australia
through its shareholding in Alliance, one of our larger
competitors. Across the Tasman, Baycorp largely dominates
the Credit Information business and has a strong hold on the
Receivables Management business.

At the time I took up
my role with Baycorp that company was in dire financial
straits indeed. It had a large debt which it could not
service, a poor balance sheet and a range of investments and
subsidiaries which not only were non core to its basic
business but were also generally unprofitable. By taking
Baycorp back to its core business, streamlining its
processes and cutting its costs, the company became very
profitable. By 1994 Baycorp had paid off its debt and
become a strong, focused organisation with a well considered
business strategy. Through the mid 1990’s until I
resigned in 1998, Baycorp was consistently the New Zealand
Stock Exchanges top performer.

Obviously that background
is relevant to my position at RMG. However I also have an
extensive background in general business through a number of
other industries including tourism, hotels, and finance. I
also have a strong interest in and understanding of
marketing.

I mentioned earlier the opportunity I believe
RMG now has to outperform the market generally in coming
years. Let me tell you why this opportunity exists.
Throughout the difficult period which the company has faced
in rolling up the vendor companies which make up RMG, the
most encouraging aspect of its business has been the
retention of our customer base and the continued growth of
the company’s revenues. This tells me two things about
the company. Firstly, we are performing an excellent
service for our customers which has enabled us to retain and
grow our business in the face of strong competition.
Secondly, it tells me our most important asset, the skills
of our people, are second to none in the industry. And in
this industry, believe me, if you have the right people, you
will succeed.

From a revenue perspective, RMG has another
important asset not shared by some of its competitors.
Our customer base by virtue of the vendor companies has an
extensive mix by industry, geographic, location and size.
This places us in a strong position from the viewpoint of
industry or regional fluctuations.

What hasn’t been
achieved in RMG to date, is the operational efficiencies
which should have flowed from the roll up and which were
envisaged at the time of the float. My most important task
over the next period therefore will be to drive those
efficiencies within the company, to wring out a substantial
increase in profitability. One of my goals will be to
ensure that the measurement of our operating costs, as a
percentage of our revenue, continually drops to demonstrate
that we are continually working to become a more efficient
business unit, providing greater value for its shareholders.
I look forward to demonstrating this in coming years.

The
debt collection industry has changed markedly over the last
decade from what was virtually a cottage industry to now an
industry dominated by major corporate players. The
exciting aspect of this is that there are still a large
number of major businesses in both Australia and New Zealand
handling their debt collection in-house and who have yet to
be exposed to the increased efficiencies and reduced costs
RMG can bring their businesses. It will be our job to
ensure that those efficiencies are demonstrated and that
those potential customers provide the substantial growth in
RMG’s revenues we will also seek.

There is also an
acceptance by corporates, of the services an organisation
such as RMG can provide outside of just debt collection.
As we improve the efficiency of the company and strengthen
our balance sheet, the ability to undertake some of these
business opportunities will be open to us.

There will be
numerous openings before RMG as we move forward. RMG will
be selective in those it chooses to undertake. Our task
is profitability, not size for the sake of size. One
opportunity we will pursue is the acquisition of distressed
debt ledgers. This profitable niche of the industry is
well known to me and an area which will provide attractive
returns in the future.

Finally I thank you for the
opportunity to be part of RMG. I look forward to sharing
an exciting and profitable future with you.

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